Differences Between Interim, Part-Time, and Fractional CFOs

Fractional CFO services construct cash flow projections based on historical and current data to help you plan and make informed business decisions. This can include projecting cash inflows and outflows and identifying potential issues and opportunities. A fractional CFO may be an independent consultant or an employee of a CFO firm. On the other hand, fractional CFOs provide financial services to a company on a part-time basis, almost like a vacation timeshare. This means that they will work for you for only a few days every week and have the liberty to provide the same services to other companies simultaneously.

Leveraging a fractional CFO allows growing businesses to tap into C-level financial expertise without incurring the cost of a full-time CFO’s salary, benefits and bonuses. A fractional CFO has a high-level of financial expertise and can assist businesses with a variety of strategic and financial needs and issues. This finance expert can weigh-in on important business decisions and deliver value by tracking key metrics and always looking forward. Because they are not an employee of the company, they may not be as immediately accessible as a full-time CFO, but their knowledge and expertise is no less valuable to a business requiring effective financial strategy. Is your company ready for a financial point person, but you’re not sure if you can afford a full-time chief financial officer (CFO)? Rather than paying for a full-time employee or going without this much needed position, there is an option in between.

Benefits Of A Fractional CFO You Didn’t Know You Needed

If you’re considering becoming a fractional CFO, it’s important to know when a company might need your services. Retail and food services sales rose 3% month over month in law firm bookkeeping January, according to an S&P Global Market Intelligence analysis of U.S. Shoppers in the U.S. spent more than economists expected, estimating the figure to rise 1.7%.

Fractional Chief Financial Officers can give entrepreneurs an edge in understanding financial metrics, making better strategic decisions, and driving growth through improved cash flow management. They also bring the expertise of an experienced professional at a fraction of the cost, giving growing businesses access to high caliber professionals without breaking the bank. Areas where companies commonly engage with fractional service providers include Human Resources, IT, Finance and Accounting, and Marketing. Working with a fractional service provider can be especially beneficial for businesses with limited resources and capital (e.g. startups and small businesses). Besides having a tight grip on company finances and cash flow management, a growing company will need capital injections to grow or to sustain operations in a downturn. Fractional CFOs can assist with fundraising (typically starting at Series B) or with debt (e.g., negotiating bank loan terms).

What is a Fractional Executive?

They can help with mergers and acquisitions, corporate restructuring, strategic planning, budgeting and forecasting, as well. Even budgets can quickly become a hassle when you struggle to stay on top of the numbers. One of the first questions that most people have is, what is a fractional CFO? Rather than a full-time, in-house employee, a fractional CFO is a part-time specialist who is contracted to work with your company.

• As the business is scaling, new team members will join the company, and you will want an experienced CFO in place to ensure the core values and culture of the organization are maintained.
• The same idea applies to hiring a firm that provides outsourced CFO services and can offer a fully outsourced finance team.
• A fractional CFO helps determine how to get you from where you are to where you want to go.
• Restructuring a company requires in-depth knowledge of processes (see above), an ability to assess how to optimize capital structure, and an understanding of cost optimization and cash flows.
• Startup fundraising can be tricky, and one of the biggest challenges startups face.
• Or, they want an outside, unbiased opinion to inform their financial strategy.

While a CFO offers many of the same services as a fractional CFO, the main difference is in the time commitment. Fractional CFOs are typically part-time and outsource their services on an hourly basis. Fractional CFOS also helps you generate the reports you need to make effective decisions for your business. This helps support decision-making inside your organization, but it also gives you the information you need to entice investors, lenders, and other external stakeholders. Instead, work with our CFO professionals on a contract or retainer basis, and they provide you with all of the services of a full-time CFO. Gary serves clients by offering them proactive tax advice, business advisory services and consulting work as a fractional CFO.